- What are the products and product categories on which the store is providing discounts?
- What type of discounts are given, e.g. price reduction, bundle offers, in-store discount, bundling, combo offers, quantity discounts etc.
- What kind of people are looking for discounts. Do rich people really care about discounts?
- Do discounts help in increasing sales?
- Do discounts affect impulsive buying behaviour?
Some of the most memorable quotes on Customers are:
"It is not the employer who pays the wages. Employers only handle the money. It is the customer who pays the wages" - Henry Ford
“There is only one boss. The customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else"- Sam Walton
In a recent HBR article ("Let Emerging Market Customers Be Your Teachers", HBR, December 2010), the authors gave out an interesting insight quoting McKinsey studies. "In developing economies, the retail aisle is where the marketing action is - it's where the customers make purchasing decisions. McKinsey studies show that in China, for example, as many as 45% of customers make those decisions inside stores, compared with 24% in the United States."
Although their study did not include India (the authors conducted a study in 2009 in China, Poland, Turkey, Brazil, South Africa and Peru), I am sure the results would apply equally well to Indian retail landscape as well.
How to engage the customers at the store level? What kind of experience should stores offer to the customers that would increase their customer life time value? How to improve the customer experience at the store level?
To answer these questions, I have developed a model titled - 7 As Approach to Customer Experience Management at Store Level - that would help retailers orchestrate a better and delightful customer experience management at the store level. Remember however: It is only when all these 7As are used simultaneously that the stores can expect better delivered customer experience and not in isolation.
Are rural customers' different from urban and semi-urban customers? What distinguishes their consumer behavior? When someone looks at the kind of glossy and rosy presentations on the potential of India's rural markets, one can not help but get bemused. Why get bemused? It's for the simple reason that none of those presenters nor the people from whom these presenters would have got the information would have ever visited even one village and tried to find out for themselves as to what it is like living in a rural area? It's not to blame them though. Rather, it is to sensitize others to take those glossy presentations with a pinch of salt. When you are on a extrapolation, can that be called an exploratory study? And most of these estimates are extrapolations rather than based out of any valid and wholesome sample.
To understand rural consumers behavior, I have developed an exclusive model that we used it during GRAMDARSHAN, Aegis Global Academy's Rural Immersion Workshop in three different villages - Nanjagoundanpalayam, Vellalapalayam and Thottipalayam in Gobi (75 kilometres from Coimbatore).
Termed PYRAMIDS model, this is an intuitive model that we used for assessing rural consumers' behavior. It was good although it wasn't the best. Based on this model, the questionnaire was constructed and administered amongst 480 customers across 3 villages over 2 and half days and the behavior can largely be categorized into this model.
What does, MISSION FIRST, ME NEXT mean? Not getting into the philosophical underpinnings of the purport of this adovcacy issue, it means that it is every employee's responsibility to put organizational goals first and the individual goals next. Remember, Henry Fayol's 14 principles of management? One of the fourteen principles says, "subordination of individual interest to general interest". How true and prophetic he was.
Most of the times the employees assess do I like it and then do. Some employees are forced to "I should" therefore I do. What is the difference between these two sets of employees. While the first set of employees become HOBBY HORSES the second set of employees become SULKING SAINTS. And both are detrimental to the long-term and larger interests of the organizations. While the hobby horses would drive the companies towards their passtime favorites at the cost of negative returns (most probably) the sulking saints would let the sheens off the companies because they would not be giving their best to the companies. In other words, while hobby horses indulge in "I Like" activities, sulking saints "I should" activities. And as argued earlier, the companies would suffer from these corporate extremeists.Therefore what's the way out? According to me, the best you can do is to convert "I should" into "I Like" so that you start loving what you are supposed to be doing.
How many of you love everything that you do? How many of you love everything that you are asked to do? How many of you love doing what you want to do? How many of you love to hate what you are doing? The answers to these questions decide what and how much the organizations stand to get to from you and me. And you and me are there to let the organizations flourish so that we too can flourish under its ever-expanding umbrella and it is not the otherway around.
Let's make no mistake in interpreting our roles. We are there to serve organizational interests and not our selfish interests. If we cannot let organizations prosper, how would organizations let us prosper?
Firstly, thanks to our ever-accommodative students (the batch of 2011) and the esteemed colleagues at the Academy who bore the brunt of inconceivable inconveniences during those three days, we could have a first hand experience of rural consumers.
Before I share my observations from our rural immersion workshop (GRAMDARSHAN), let's ask these questions:
(a) What is RURAL? Is there any standard definition of RURAL as defined by someone like Nactional Council For Applied Economic Research (NCAER), or Ministry of Rural Development, Government of India or any other apex institution in the country?
(b) Who is a rural consumer? What are his/her income generation sources and what are his/her spending patterns?
(c) What are unique and distinct characteristics of rural consumers?
(d) What is his/her educational background and what are his priorities in life?
(e) How does he/she measure the progress of his/her life? In other words, are there any specific yardsticks with which he/she measures the progress of his/her life?
(f) What are their priorities? In other words, how does Maslow's hierarchy of needs framework works in the case of rural consumers?
(g) Who/What influences their buying decisions?
(h) What are their aspirational values and lifestyle statements?
(i) What are the moments of truth when they shop around?
(j) Is there any significant between standard of living and standard of life for the rural consumers?
In the next post, I would try to answer these questions from the survey that our students did in the three villages. There are some very interesting insights that we got from this wonderful field study. More than exposing the students to the ground realities, the GRAMDARSHAN became a window for them to see through the lenses of the rural consumers firsthand.
This program involves students staying in 3 villages near Gobichettipalayam, 60 kilometers from Coimbatore for 6 days. Divided into three different teams, each team spends two days in each of the village on a rotation basis so that each of the team spends 2 days in each of the village. During this field visit, each of the team would be physically stationed sans their regular luxuries - mobile phone, lap tops, well-furnished and air-conditioned classrooms, air-conditioned off-campus, hot-served food, etc. It is not to steal away what they deserve, after all. It is more to let them empathy with the target group - the rural markets. The resulting dissonace (if at all!) would enable them to not only appreciate the ground realities but also equip them to serve them better in latter years.
Especially from the view point of delivering better customer experience to the rural customers, what better way is there than to visit them at their place and understand their innate needs, drives, motives, implicit and explicit behavior etc?
